• The US Dollar falls slightly but holds the recent recovery, which was driven by Thursday’s upbeat US data.
• Robust US Retail Sales growth and lower weekly Jobless Claims diminish the risks of a hard landing.
• Traders pare bets favoring a  50 basis point interest-rate cut by the Fed.

The US Dollar (USD) edges lower in Friday’s European session but holds the recovery seen on Thursday as traders’ fears about a recession in the United States (US) ebb. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, hovers near 103.00 after recovering from a 10-day low of 102.27 on Thursday.

The Greenback bounced back strongly after upbeat US economic data also supported bond yields. 10-year US Treasury yields fall to near 3.91% in European trading hours, but are decently up from their weekly low of 3.81%.

The data on Thursday showed that the US Retail Sales grew at a robust pace in July after contracting in June. Retail Sales, a key measure of consumer spending, rose strongly by 1% against expectations of 0.3%, diminishing fears of a hard landing.

Also, fewer-than-expected Americans filing for jobless benefits for the first time for the second consecutive week indicated that labor market conditions are not as bad as they seemed after the release of the Nonfarm Payrolls (NFP) data for July. The US Department of Labor showed that Initial Jobless Claims came in at 227K, lower than estimates of 235K and the prior release of 234K.